October Elections and the Exchange Rate: What to Consider When Investing in Both Countries

Brazil goes to the polls on October 4, 2026, to elect the president, governors, senators, and representatives, with a possible runoff set for October 25. Historically, this kind of calendar increases volatility in the real and in the Brazilian stock market, and anyone with wealth or cash flow between Brazil and the United States feels that effect up close.

The market mood before the first round

According to a BB Investimentos survey, September began with a backdrop that combines high rates in both Brazil and the United States, geopolitical risks, and growing investor attention to the Brazilian election. In August, the dollar regained strength and closed the month at R$ 5.19, a 2.22% gain over the period, while the Ibovespa ended down 0.33% after a month marked by sharp volatility: the index had accumulated a 6.5% loss through the 18th, recovering part of that in the final stretch.

Industry surveys also point to foreign investors leaving the Brazilian stock market, together with electoral uncertainty, as one of the factors weighing on domestic assets, which reinforces the caution several research houses recommend for Brazilian equities until the result is defined.

Practical points for those operating in both countries

First, remittance planning: if a large transfer between Brazil and the United States is scheduled over the next two months, it is worth designing a timetable that does not depend on hitting the exact day of the exchange rate, spreading the operation instead of concentrating everything near the first or second round.

Second, diversification as protection, not as a bet: keeping part of the wealth in dollars and part in reais, according to cash needs in each currency, tends to smooth the effect of any surprise at the polls, whatever it is.

Third, investment decisions should not be made on the basis of a predicted election result. Brazilian history shows that the market reacts to the result itself and, above all, to the composition of Congress and to the economic-policy signals that come after the election — not to the favorite indicated by polls.